Economy: Germany and the eurozone take off

For Germany, we expect positive economic growth in 2026, which will herald a recovery after several weak years. The stronger growth is primarily due to increased government spending on infrastructure and defense, which should also stimulate growth in other sectors. This positive development is being supported by fiscal policy measures and a gradual improvement in the domestic economy. Despite this positive outlook, growth momentum remains rather subdued in an international comparison, with uncertainties persisting due to global trade relations.

The eurozone is waking up again!

An important growth driver for the eurozone is the combination of rising real wages and a robust employment situation, which should provide positive impetus for consumer demand. Rising domestic demand instead of the predominant dependence on exports would also strengthen Europe’s resilience – both economically and politically. A less tense geopolitical situation will also stimulate growth. For example, the easing of trade tensions between the US and China, in particular the removal of export controls on critical raw materials, has strengthened the European manufacturing industry and reduced the risks of international supply chains. The European Central Bank also has scope to intervene to support regional challenges by lowering interest rates.

But beware! Risks also remain: Persistent protectionist tendencies in international trade could slow down growth. In addition, the political tension within and outside the eurozone is currently leading to consumer restraint. For the time being, people are therefore saving the rising real wages rather than spending them. Nevertheless, the positive signals and options for action clearly outweigh the negative ones.

USA: AI drives growth and productivity

The growth prospects for the US economy also remain positive. It is benefiting from a combination of strong private consumer spending, corporate investment and technological innovations. Particular attention is being paid to investments in artificial intelligence (AI), data centers and intangible goods, which will strengthen productivity and competitiveness in the long term. We expect productivity growth to accelerate in 2026, including in companies outside the technology sector, due to the wider availability of AI solutions. While these productivity gains will slow the creation of new jobs in the US economy, the labor market will remain solid and wages will continue to rise faster than inflation, partly due to lower immigration levels. At the same time, higher inflation coupled with the politicization of the Federal Reserve, uncertainties regarding the impact of trade tariffs and ongoing political polarization pose challenges.

Bonds: Corporate bonds as the key to attractive returns

The starting position for bond investors is much more constructive than in previous years. From an investor’s perspective, companies are fundamentally very well positioned, while the debt of many countries is increasingly proving to be a negative factor. As a result, corporate bonds are once again taking center stage. This is not least because attractive coupon levels ensure high current income.

The falling level of inflation in the eurozone is also improving the real yields on fixed-interest securities. For investors, this means that the purchasing power of the interest coupon is increasing. At the same time, global yield curves have stabilized after the turmoil of 2022-2024. They are now steeper and offer an attractive yield premium, especially for medium and longer maturities. Those who consciously hold duration in their portfolio can therefore benefit from a higher current yield. In the case of US interest rates, we increasingly prefer medium maturities, as an increase in inflation and thus interest rates cannot be ruled out for longer maturities.

Another positive factor for bond investments is the return of the negative correlation between equity and bond yields. This development strengthens the traditional diversification advantage of a balanced portfolio with mixed asset classes and facilitates the tactical management of portfolio risk. Especially in a geopolitically tense environment, more reliable cash flows through the addition of corporate bonds are gaining in importance; they create planning security and reduce dependence on short-term market movements.

Conclusion on bonds: The year 2026 offers an attractive risk/reward ratio for fixed-income investments, especially for bonds with high credit ratings. Corporate bonds with solid credit quality and exposure to medium to long maturities enable investors to achieve higher returns while benefiting from the improved macroeconomic situation.

Equities: High valuations require targeted selection

The global stock markets are starting the new year with positive momentum: prices are once again trading at or near their all-time highs. These price rises are being supported by extremely robust corporate profits, particularly at major international companies. At the same time, valuations are now ambitious, and not just for US companies. Although this does not increase the probability of a setback, the extent of a possible market correction could be greater. In this highly valued and sensitive environment, in which earnings disappointments could lead to significant price falls, selective stock picking therefore remains of fundamental importance. Investors should therefore focus on companies that can defend and expand their sales and margins even in a challenging environment.

At the same time, promising prospects are opening up for Europe. Enormous government and private investment programs have recently been expected here, which has led to above-average performance in the short term. However, the programs have not yet been reflected in correspondingly high sales and profits. There is therefore additional potential if the announced funds actually flow. We expect a similar effect here as in Italy following the disbursements from the NextGenerationEU program. There were also doubts about implementation back then. However, when the first successes became apparent, this triggered a phase of above-average share performance lasting several years.

Revolution through artificial intelligence

Artificial intelligence remains the dominant trend topic that divides opinion. Are we on the verge of an AI bubble bursting, comparable to the dot-com crash of 2000? Or are we seeing the beginning of a long-term, technology-driven upswing comparable to the internet boom of the 1990s?

On the one hand, the AI trend can provide further short-term share price momentum; on the other hand, a high valuation premium increases the requirements for a successful conversion of the technology into earnings. We are on the side of the optimists on this issue.

AI-supported applications will become increasingly widespread and lead to real economic efficiency gains and thus further productivity gains. Naturally, there will be both winners and losers among companies. For investors, this means carefully weighing up opportunities and risks, positioning themselves correctly at an early stage and not neglecting stringent risk management of their equity portfolios.

Conclusion on equities: The bottom line is that 2026 will require a balance between risk management and the exploitation of numerous existing opportunities. High valuations call for caution, but a targeted, selective stock selection – for example, stocks that benefit from government investment programs or AI-supported productivity increases – continues to offer attractive potential for positive results.

Sustainability: resilience and risk management

Sustainable investing is currently facing a phase that is both promising and complex – characterized by significant differences between the United States and Europe. While Europe is clearly moving towards greater sustainability, the US continues to face political hurdles that make sustainable investment strategies more difficult. The political changes make it difficult for investors there to focus on sustainable investments in the long term, meaning that they often have to weigh up short-term political pressure to adapt against the strategic avoidance of risks from non-sustainable investments.

The trend towards sustainable investments has also experienced a turning point in Europe. In recent years, sustainability had been pushed into the background by the energy crisis following the start of the Russian war of aggression in Ukraine and a perceived overload of public opinion with exceptional situations in quick succession.

By contrast, we expect a renaissance of sustainable investments in 2026. In contrast to the USA, public opinion in Europe is very clear: sustainable action is necessary and often taken for granted. Increasing clarity in the product positioning of providers and simplified regulation will also transfer this correct and important attitude more strongly to our own investments.

However, as a provider of sustainable investment strategies, we also use environmental, social and governance (ESG) indicators as an important element of risk management, regardless of trends and sentiment. Technological advances, such as the use of artificial intelligence to better assess sustainability risks, help us with our modeling. These technologies make it possible to analyze large amounts of data efficiently and precisely, which helps us to make informed decisions and achieve financial benefits – regardless of short-term political developments.

All in all, sustainable investments will continue to offer promising opportunities in 2026. Active dialog between investors and companies is a key component of economic and social change. By vigorously pursuing and transparently communicating their sustainability strategies, investors not only create added value for their investments, but also promote the transformation of entire industries. This creates genuine “investments for a better world”.

Multi-Asset: Flexibility in volatile times

We are currently experiencing a phase of epochal change. Artificial intelligence is changing the way we live, interact and work. Companies are investing enormous sums in data centers and developments whose application is undisputed, but whose economic success appears far from assured. At the same time, technological progress is also increasing social tensions. Social conflicts and political unrest dominate the news. In addition, geopolitical conflicts are building up that have the potential to eclipse all other issues in an increasingly polarized world.

The question for investors is how they can gain clarity and position themselves correctly in this complex environment. The aim must be to benefit flexibly from regional differences in economic development, to profit from the current stable interest rate environment, but at the same time to be prepared for a possible resurgence of inflation in individual countries. It is important to invest in companies that are positioned to benefit from technological developments, without losing sight of sustainable economic activity.

The simple answer in this complex situation is multi-asset approaches, as they allow investors to rotate flexibly between sources of return and spread risk widely. A key advantage is the continued negative correlation between traditionally lower-risk fixed-income securities and often higher-yielding equities, which provides natural hedging effects and can stabilize portfolios during downturns.

However, the recent past has also shown that this simple answer is no longer sufficient in the modern investment world. Correlations can change, new influencing factors are added and technological advances also mean that risks are materializing on the capital market ever faster and at shorter intervals.

We at EB-SIM have therefore deliberately added further building blocks to our multi-asset strategies in order to counter these new influences and give our investment strategies stability even in turbulent times. First and foremost is the inclusion of alternative asset classes, in particular investments in sustainable infrastructure. These fulfill all the criteria that are important to us: positive return contribution, low correlation to traditional asset classes and a positive sustainability profile.

Dynamic and flexible risk management that incorporates macroeconomic indicators, market volatility and liquidity signals also helps to noticeably reduce the maximum loss in value in technologically, politically and geopolitically volatile phases. Overall, there is much to be said for relying on broadly diversified, actively managed multi-asset strategies in 2026. They combine flexible capital allocation, natural hedging and aspects of sustainability to create a balanced return profile that offers attractive opportunities even in volatile markets while limiting the risk of loss.

DeepDive Webinar: Capital market outlook 2026

On January 13, 2026, Sebastian Kösters, Managing Director and Chief Investment Officer, and Maximilian Ritz, Head of Wholesale, will present the key findings of our Capital Market Outlook 2026 – compact, well-founded and practical for your investment decisions.

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This is a marketing communication and is intended exclusively for persons domiciled or habitually resident in the Federal Republic of Germany. The contents of this document are for information purposes only. It does not constitute investment advice/recommendations, nor an offer or advice to buy/sell the fund. The sales documents (basic information sheet, sales prospectus, annual and semi-annual reports), which you can obtain free of charge on the relevant product page at https://eb-sim.de/uebersicht-investments/, form the sole binding basis for the purchase. Please refer to the sales documents for the opportunities and risks. A summary of your investor rights in German can be found at www.universal-investment.com/media/document/Anlegerrechte and/or https://www.ipconcept.com/ipc/de/anlegerinformation.html. The information contained in the document does not constitute an investment strategy recommendation within the meaning of Section 85 WpHG. Past performance, forecasts and other simulations are not a reliable indicator of future performance. Information on the aspects relevant to sustainability in accordance with Regulation (EU) 2019/2088 can be found on the corresponding product page at https://eb-sim.de/uebersicht-investments/. The management company may decide to revoke the arrangements it has made for the distribution of the units of its undertakings for collective investment in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU.